Indian Financial System jaiib important questions and answers .docx

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					Indian Financial System jaiib important questions and answers

Sl    Question                                                                      Answer
 1    The structure that is available in an economy to mobilize       Financial system.
      the capital from various surplus sectors of the economy
      and allocate and distribute the same to the various needy
      sectors is known as ----------
 2    The transformation of savings into investment and               Ans True
      consiumption is facilitated by the active role played by
      the financial system. True or false.
 3    Banks, Financial Institution mutual funds etc are               Ans: True.
      examples of Financial Intermediaries. True or False.
 4    Financial market include Money Market, Debt Market,             Ans Capital Market
      Forex Market and ----
 5    Treasury bills are money market instrument True or              Ans : true
      false.         .
 6    Certificate of Deposit is a money market instrument True        Ans True.
      or false.
 7    Commercial paper is a money market instrument True or           Ans True
      false .
 8    Call money and Notice money are Money market                    Ans True.
      instruments True or false.
 9    G Securities issued by Central and State Government             Ans True
      are instruments in Debt Market. True or false.
 10   Bonds issued by Financial Institution are instruments in        Ans True.
      Debt market. True or false
 11   Reserve Bank of India has two distinct roles one is             Ans:
      Monetary Control including controlling inflation and other      Bank supervision
      is -----------
 12   Reserve Bank of India is exercising Monetary Control            Ans Bank rate.
      through 1) cash Reserve Ratio, 2) Statutory Liquidity
      Ratio 3) REPO rate and ---------
 13   Central Bank (RBI) is lender of the last resort to other        Ans : True.
      Banks True or false.
 14   ------------ is responsible for ensuring an efficient payment   Ans : True.
      & settlement system. True or false.
 15   Reserve Bank of India has supervision over 1)                   Ans : True
      Commercial Bank 2) NBFC 3) Primary dealers 4)
      Financial institution True or false.
 16   Reserve Bank of India is Banker to Government True or           Ans True.
 17   Capital Market Regulator in India is SEBI True or false         Ans True
18   The standard rate at which RBI is prepared to buy or re       Bank rate
     discount bills of exchange or other eligible commercial
     papers from Banks is known as
19   No Bank can hold shares in a company as pledge or             Sec 19(ii) of BR Act
     mortgage in excess of the limit of 30% of the paid up
     capital of that company or 30% of the Bank’s paid up
     capital and reserve which ever is less. This is covered in
20   A mutual fund is a form of collective investment that         Securities    and
     pools money from investors and invests in stocks, debt        Exchange Board of
     and other securities. It is a less risky investment opinion   India)
     for an individual investor.
     Mutual funds require the regulators approval to start an      SEBI
     asset management Company (the fund) and each
     scheme has to be approved by regulator before it is
     launched. Who is the regulator.
21   Foreign based funds authorized by the Capital Market          Foreign Institutional
     Regulator to invest ion Indian Equity and debt market         Investors.
     through stock exchanges. These are called.
22   Registrars maintain a Register of share and debenture         Securities    and
     holders and process share and debenture allocation            Exchange Board of
     when issues are subscribed. Registers need approval           India)
     from Regulator. Who is the regulator
23   Depository hold securities in ---------- form (as opposed to Electronic form
     Physical form) maintains accounts of depository (Demat)
     participants who in turn maintains sub accounts of their
     customers. On receiving instructions from Stock
     exchange clearing house supported by documentation a
     depository transfers securities from the sellers account
     to buyers account in ------------ form
24   A Bank undertake a number of activities such as Investment Bankers
     undertaking the issue of stocks fund raising and or
     management. They also provide advisory services and merchant Bankers.
     counsel on mergers amalgamation etc. They are
     licensed by capital market regulators. The above Bank is
     called ----------
25   Brokers perform the job of intermediating between Brokerage.
     buyers and sellers of securities. They help to build up an
     order book carry out price discovery and are responsible
     for brokers contracts being honoured. These services are
     subject to -------------
26   Doing Banking business with Industrial and business            Wholesale Banking.
     entities – mostly Corporate and trading houses including
     multinationals domestic business houses and prime
     public sector Companies.
27   The Credit information Bureau (India) Ltd           (CIBIL)    Consumer
     incorporated in 2000, aim at fulfilling the need of credit     (Individual)
     granting institution for comprehensive credit information
     by collecting collating and disseminating credit
     information pertaining to both commercial and --------------
     ---- borrowers.
28   ------------ refers to the dealing of commercial Banks with    Retail Banking
     individual customers. Both on liabilities and assets side
     of the balance sheet. Fixed, Current, Savings accounts
     on the liability side and personal loans housing auto
     loans and education loans on the asset side are the
     important product offered by Banks to individuals. The
     related ancillary service include Credit card, debit card
     depository services
29   Today’s retail Banking sector is characterized by three        1).Multiple product.
     basic features. What are they.
                                                                    2).Multiple channels
                                                                    of distribution

                                                                customer Group.
30   Multiple product in retail Banking means                   Deposit,      Credit
                                                                card, Insurance ,
                                                                Investment      and
31   Multiple channels of distribution in retail Banking means. Call        Centres,
                                                                Branch,     Internet
                                                                and ATM (Kiosk)
32   Multiple customer Group in retail Banking means            Consumer,     Small
                                                                Business        and
33   Zero Balance Account for Salaried class people is a         Retail     Deposit
34   Banks provide preshipment finance in the form of export Export         packing
     packing credit both in rupee as well as in foreign credit.
     currencies to assist exporters for manufacturing or
     packing the goods for export from India.
35   In respect of export bills drawn under LC , if the            Negotiation      of
     documents are found to be strictly in terms with LC           export bill   under
     condition the Bank of the export customer / or the            LC.
     nominated Bank make payment of bill to the exporter
     and send the bill for realization to the LC issuing Bank or
     reimbursing Bank. This process is known as -----------
36   This facility enables Indian Exporters to extend term         Suppliers Credit.
     credit to importers (overseas) of eligible goods at the
     post shipment stage. This is known as --------------------
37   EEFC Account stands for                                   Exchange Earners
                                                               Foreign    Currency
38   ADR stands for                                            American
                                                               Depository Receipt.
39   ADR are typically traded on US national stock exchanges True
     such as New York Stock exchange or American Stock
40   GDR stands for                                            Global Depository
41   In --------------- Securities share bond debentures are The primary market
     offered to the public for subscription for the purpose of
     raising capital or fund.
42   The primary market is classified into public issue market Private placement.
     and -----------

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